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Canadian Whisky Builds Value With A Focus On Rye

December 1, 2016

While tapping into growth with flavors Canadian whisky is also building value by leveraging its strength in the rye segment. Diageo-owned Crown Royal’s first rye edition—Crown Royal Northern Harvest Rye ($29.99)—was launched in mid-2015 and sold around 100,000 cases by year-end. This past spring, Crown Royal also rolled out Cornerstone Blend ($60), the first release in its Noble Collection.

Beam Suntory, meanwhile, debuted Canadian Club 100-percent rye in May ($18-$20). “It’s our biggest growth driver right now,” says Nathalie Phillips, marketing director, world whiskies at Beam Suntory. “Whenever possible, we place it in the rye section rather than the Canadian section at retail. As younger consumers peruse whiskies, they’re not necessarily going straight to the Canadian section. They’re more interested in the overall rye category.”

Beam Suntory used a similar strategy when launching its Alberta Rye Dark Batch whisky (roughly $30) in 2015, and the company has a merchandising program, called I Heart Rye, which encompasses its entire rye portfolio. “We display each of our different ryes from the United States and Canada, organized by flavor profile and signature cocktails,” Phillips explains.

“People want heavier, more robust whiskies these days, and Canadian whisky is adapting with more rye-forward offerings,” says Don Livermore, master blender for Pernod Ricard’s J.P. Wiser’s, Lot 40 and Pike Creek brands. “We’re increasing our focus on Lot 40, starting in Michigan and Illinois,” adds Lot 40 business leader Gerard Graham. “And Pike Creek is the perfect introduction for consumers looking to trade up from mainstream whisky offerings.”

Among craft spirits, some of the more successful brands of recent years are Canadian whiskies—often comprising 100-percent rye—that have been bottled by American companies such as Vermont-based WhistlePig. Oregon’s Hood River Distillers launched the Pendleton brand in 2003, while Sonoma, California-based 3 Badge Beverage Corp. debuted Masterson’s rye whiskey in 2011. Those companies source whisky from unnamed Canadian distilleries.

“The Canadians have always made good rye,” says Ryan Maloney, owner of Westborough, Massachusetts-based Julio’s Liquors. “When rye started heating up, Canada became the place to get really good stuff. It’s still an untapped resource.”

Julio’s recently sold out of a single barrel of Masterson’s at $69.99 a 750-ml. and currently offers a single barrel of Sazerac’s Caribou Crossing ($54.99 a 750-ml.) Maloney cites Pendleton ($24.99 to $129.99), Forty Creek ($24.99 to $69.99) and Lot 40 ($49.99) as other top-selling rye brands. He adds that the store has expanded its SKU count in recent months due to the influx of new, high-quality entrants in the category, including Pendleton Directors’ Reserve ($129.99), a 20-year-old Canadian whisky.

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